Survey: Australian manufacturers say reshoring likely by 2023

The Australian Manufacturing Outlook survey revealed confidence that the Australian economy is growing, with more companies signaling they intend to bring manufacturing operations back to Australia. Nearly one quarter (22%) of respondents have already reshored operations, with nearly half of companies’ overall manufacturing capacity (48%) targeted to return to Australia by 2023. Western Australia, Northern Territory and South Australia are poised to lead the nation’s charge on reshoring over the next three years according to respondents, with a focus on creating local jobs and growing priority sectors such as lithium batteries, defence and space, and capitalising on their respective geographic advantages.

The rise to reshore has been driven by the need to future-proof critical supply chains in the face of market change and disruption, to minimise risk and protect jobs in key industries. This is coupled with the Federal Government’s support through the Modern Manufacturing Strategy and strong consumer preference (89%) towards our nation producing more products, according to research conducted by Roy Morgan.

Three-quarters of those surveyed (78%) believe Australia possesses the technology, people and economic strength to support the creation of an agile manufacturing base, which would better protect and reinstate the local production of goods. Recent quarterly GDP data (released in December) also revealed a growth of 3.1%, as Australia pushed through the height of the pandemic.

However, Australian manufacturers are underprepared to compete in a digital economy, with 82% of survey respondents still in the planning process or yet to implement e-commerce channels to sell to domestic or international buyers; only 9% also have market-aware, dynamic pricing strategies.

“The economic recovery is well underway, but Australian manufacturers must equip themselves with e-commerce and dynamic pricing capabilities,” said Haley Glasgow, APAC Head of Strategic Consulting and Alliances at PROS, a provider of SaaS solutions that optimise shopping and selling experience. “Otherwise we risk not only stalling the economic growth already achieved but missing the right moment in history to reclaim our manufacturing heritage.

“Australia is incredibly well placed to leverage smart technologies like artificial intelligence and digital selling channels to overcome the competition challenges from imports and online sources. But to reinvent themselves, investment must be made by the government, industry and companies themselves.

“Accelerating the sales process with AI-powered insights can also deliver prescriptive guidance on product recommendations, identify cross-sell and up-sell opportunities and proactively mitigate churn risk. This investment can improve the buying experience, order accuracy and accelerate business growth as the economy recovers.”

In support of strengthening self-reliance, nine in ten (90%) Australian manufacturers are confident their company has access to a skilled Australian workforce capable of producing, marketing and selling its products through traditional and digital channels.

“As Australian manufacturers seek to reshore, it is vital they lead with a digital strategy and mindset if they are to achieve local and global competitiveness,” Glasgow added. “Leveraging price optimisation solutions to process billions of unique prices in real-time, while catering to the complexity of each buying interaction, creates a harmonised pricing strategy for 2021 and beyond.”

The Australian Manufacturing Outlook survey was conducted by independent market research firm OnePoll in December 2020. The research sample consisted of 500 senior employees in the manufacturing sector across Australia.